Finance of America Cos. narrowed losses in the first quarter and addressed a branding pivot to fully fold its
The Plano, Texas-based company saw a net loss of $20.3 million, of which $15.8 came from continuing operations. Changes in fair value gains impacted the bottom line, propelling it downward from a fourth quarter profit of $164.7 million and $14.6 million a year ago.
After announcing its intention to focus solely on home-equity conversion mortgages
The retirement solutions lending unit posted a total $4 million pre-tax loss, improving from $13 million in the fourth quarter and $9 million in the same quarter last year.
"In early Q1 we finalized the transition on to one loan origination system, the last step in the full integration process." said Kristen Sieffert, president of Finance of America Cos., in its first-quarter earnings call.
"Completing this integration paves the way for the next pillar of our strategic plan, which is to modernize our go-to market strategy," she added.
Included in its plan is a change in branding for both American Advisors Group and the Finance of America Reverse unit, effectively eliminating the AAG name entirely.
"The first step is to create a unified brand to optimize and maximize our resources and reach. This entailed sunsetting both the AAG and FAR brands and unifying under a single brand name of 'Finance of America.'"
The decision represents a
But while AAG previously dominated in the direct-to-consumer space and within reverse lending overall, Finance of America Reverse outpaced it in wholesale.
The parent company expects newly streamlined operations to drive originations up in the second quarter by approximately 10%, with its proprietary products, such as its second-lien offering, to provide much of the lift.
"We see that as one of the bigger growth opportunities for us, especially in conversations with larger traditional mortgage bankers and servicers that have portfolios of products," Sieffert said.
Finance of America also said it anticipates executing securitizations of its proprietary loans each quarter this year and into next, each totaling approximately $300 billion.
In the earnings call, leadership also briefly addressed its high-yield debt maturing in late 2025, weighing down the balance sheet. "We're moving proactively to review our options and holding productive conversations with the necessary parties to identify an optimal path forward. While it's premature to discuss specifics, we are encouraged by the early conversations," said Chief Financial Officer Matthew Engel.
As its stock value has languished over the past several months, Finance of America continues to face the threat of delisting from the New York Stock Exchange, which warned the company twice in the past six months it could potentially take action. The stock closed trading on Monday at 60 cents, well below the 86-cent mark on Dec. 12, the date of the first delisting notice.
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